Property Division during Annulments
When you are married or have been living together in a marriage-like relationship for at least two years, the law calls both of you spouses. If you separate, there are laws that dictate how the property of the spouses should be distributed. The law classifies property into excluded and family property. This article highlights important things to know about property division;
What Is Family Property?
Family property consists of everything that you or your spouse own on your divorce, except excluded property. It includes; RRSPs, the family home, businesses, bank accounts, other houses, land or condos, pensions, investments, and insurance policies. Even if the property is under one spouse's name, the law still regards it as family property.
Property Owned By one Partner before Marriage.
Whichever property you owned before living together is termed as excluded property. That means that it is not family property and that you do not have to divide the value if you do separate. However, if the property increases in value while living together, the increase is part of the family property. The increased value is equally shared between the two spouses. For instance, if you owned a home before living with your spouse and you separate, you will not have to split the total value with your partner. But you have to give them half of that increase in the house's value.
How Much Time It Takes To Divide Family Property
There are time restrictions for claiming to provide family property. The times differ for common-law partners and married people. You have to apply to split family property no later than two years after getting an annulment. This applies to married couples. If you are in a common-law relationship, you have to apply within two years of your separation date.
Which Liabilities and Assets Will Require Splitting?
All liabilities, superannuation, and liabilities belonging to each person to the relationship must be deliberated upon in splitting family property after an annulment. All liabilities, superannuation, and assets are generally called the 'asset pool.' The family cars, home, credit cards, businesses, and even money in banks are instances of liabilities and assets that will require to be divided after a divorce and form a part of the asset pool. Challenges can arise when a clash about whether a specific liability or asset should be excluded or included in the asset pool for partition between the involved people.
Now that you are informed about property division during a separation, you will likely understand how frustrating it can get. For more information regarding this and more, reach out to us.